Marital and Non-Marital Property Differences

Divorce often requires a division of property. While the parties can decide on a voluntary apportionment of their combined assets, this is not always easy to do. Divorce, after all, can be confrontational and even hostile. So the law will substitute a set of default rules where settlement is not possible.

The foundation of compulsory property division in a divorce is what is known in South Carolina as equitable apportionment. This is the separation of property between the two former spouses. Each state has its own rules for how equitable division should be applied to property owned by the spouses. The most basic distinction made in determining how property should be divided is between marital and non-marital property.

Default Marital Property Rules in South Carolina

South Carolina law defines marital property as the default rule. Marital property is essentially all property acquired by the spouses during the marriage. It is important to keep in mind that legal title is not dispositive in this determination. The family court hearing the divorce will consider a variety of factors, including the relative financial positions of the spouses, age, fault and duration of the marriage itself.

While marital property is the default rule, the statute contains a number of exceptions which are not considered marital property for the purposes of equitable apportionment, even if acquired during the marriage. These are not all obvious or intuitive, so it is important to make a complete survey of all property and develop a timeline of when and how it was acquired.

Marital Property Exclusions in South Carolina

marital property in south carolinaThe more complex aspect of equitable apportionment law in South Carolina is the exclusion regime included by the legislature in the statute. Spouses and their attorneys must give great attention to the exceptions to avoid assuming the default rule applies where it actually does not.

For example, property a spouse inherits via a will upon a third party’s death, or even as a gift from third party during the marriage, will be excluded from equitable division. This is an important exclusion because, for many people, gifts are the most prized of their possessions.

In addition, all property acquired outside the marital timeline is excluded from marital property. That means anything bought or received prior to the marriage will be kept by that spouse who brought it to the marriage. Similarly, the statute excludes property acquired after issuance of a pendente lite order (providing support to the spouse with lower income during the divorce proceedings), after the signing of a property or marital settlement, and property acquired after entrance of a permanent maintenance or settlement approval.

Non-marital property also includes property exchanged for any of the property discussed in the two preceedings paragraphs. For instance, if a spouse is given a car by their parents for their birthday and then trades that car for a boat, the boat will be considered non-marital property, taking on the status of originally gifted car for the purposes of equitable apportionment.

Just as parties can settle property apportionment themselves prior to or durint divorce, they can declare what is included and excluded in marital property via a pre-nuptial agreement.

Value Appreciation of Marital and Non-marital Property

Another complex inclusion in equitable apportionment is apprecation. It is not surprising that increases in value of property acquired during the marriage will be included in equitable apportionment. What may be surprising to some, though, is that any increase in the value of non-marital property is considered marital property in the distribution. However, this is only the case if the increase in value is the result of direct or indirect effort of one of the spouses.

If a wife acquired and paid off a home prior to the marriage, but the husband added a deck to the home during the marriage, the increase in the value of the home as a result of the deck, but not the value of the home itself, will be considered marital property for apportionment purposes.

This is another vital component of any apportionment calculation. Spouses must be meticulous in determining not only what property was acquired during the marriage, but what increases in value occurred during the marriage. It is so important to get apportionment calculation right because courts have no authority to distribute non-marital property.

Spouses who want to keep what is rightfully theirs, and who want to risk losing no more than allowed by law, must be as detailed as possible when discussing apportionment with their attorney. South Carolina law sets default rules which attempt to be as equitable as possible in apportioning property in a divorce proceeding. It is up to spouses and their attorneys to be well-versed in the inclusions and exclusions found in the law and to apply them.

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